The appellant general contractor subcontracted masonry work to a company that subsequently went bankrupt.
Relying on a clause in the general contract, the appellant paid a supplier of the bankrupt subcontractor directly, rather than paying the balance owed to the respondent trustee in bankruptcy.
The trustee sued for the balance.
The Supreme Court of Canada held that the direct payment clause could not be invoked after the bankruptcy to bypass the trustee, as the debt had vested in the trustee under the Bankruptcy Act.
The appeal was dismissed.
